Muthoot Finance Q4 net profit up 22% at Rs 996 cr; loan assets up 27%

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Gold loan finance company Muthoot Finance Ltd (MFIN) on Wednesday reported a 22 per cent jump in standalone profit after tax at Rs 996 crore for the three months to March 2021.

The company had posted a standalone profit after tax of Rs 815 crore in the year-ago period.

For the full year, the standalone net profit rose by 23 per cent to Rs 3,722 crore as against Rs 3,018 crore in FY20.

"We have seen good business growth during the last year, especially in the second and the third quarters. After the pandemic, there was a lot of demand for gold loans.

"Everybody wanted to restart their business and wanted quick funding, which is why the demand for gold loans grew," its Managing Director George Alexander Muthoot said.

The lender was able to grow its asset under management (AUM) in gold loan segment by 27 per cent in FY21 compared to a growth of 22 per cent in the previous year.

Gold loans under management stood at Rs 51,926.6 crore as of end-March 2021. During the fourth quarter of FY21, gold loan assets increased by Rs 2,304 crore.

Consolidated profit after tax increased by 21 per cent at Rs 3,819 crore in FY21 as against last year's figure of Rs 3,169 crore.

Consolidated loan assets of the group grew by 24 per cent at Rs 58,280 crore as against Rs 46,871 crore in FY20.

 

Total income increased by 18 per cent to Rs 2,828 crore during the reporting quarter compared to Rs 2,403 crore earlier.

Its gross NPA or Stage-3 assets on gross loan assets improved to 0.88 per cent as against 2.16 per cent.

Expected credit losses (ECL) provision as a percentage of gross loan assets stood at 1.19 per cent as of end-March 2021.

Capital adequacy ratio improved to 27.44 per cent from 25.47 per cent.

Muthoot said the first 15 days of April were okay in terms of business but after that demand got hit in May as branches were closed.

He expects demand to improve by the end of this month.

"Business will start reopening by the end of this month. When businesses start opening, people will need money and definitely gold loans will pick up like last year," he explained.

Muthoot expects a 15 per cent growth in AUM in the fiscal 2021-22.

"Generally, we give a guidance of 15 per cent but in the last three years we have been able to do (grow) more than that. This year, our guidance is also 15 per cent but will surpass that," he said.

MFIN's housing finance subsidiary Muthoot Homefin (India) Ltd (MHIL) reported a dip in net profit at Rs 13 crore in FY21 as against Rs 32 crore last year.

Its Stage-3 assets on gross loan asset stood at 4 per cent and net of Stage-3 ECL provisions was 2.78 per cent as on March 31, 2021.

Its microfinance arm Belstar Microfinance's profit after tax stood at Rs 47 crore in FY21 as against Rs 99 crore in the previous year.

The company's scrip ended at Rs 1,414 apiece, up 8.06 per cent, on BSE on Wednesday.